API: Slide in petroleum product demand continues

For the third consecutive month, US deliveries of major petroleum products declined in October.

The American Petroleum Institute reported last week that deliveries-a key measure of consumer demand-declined by 1.7% compared to a year ago.

The biggest decline was in residual fuel oil, used in heavy industry, which dropped to 25% below deliveries of last year.

Kerosine jet fuel deliveries, at 12% below year-ago levels, marked the first double-digit decline in more than 10 years. While jet fuel demand had been declining in the late summer, API said the Sept. 11 terrorist attacks caused a substantial drop in October of 1.565 million b/d.

Gasoline deliveries, however, at 8.673 million b/d were up 3% compared to last year. From early September to October's end, retail gasoline prices dropped 34¢/gal. That translated into a 22% decline, the steepest price drop over that period of time in at least a decade. Compared to a year ago, retail gasonline prices were down 14%, the biggest year-to-year plunge in almost 3 years, according to the US Energy Information Administration.

A vandal's bullet fired into the Trans-Alaska oil pipeline in early October disrupted operations for several days and caused the state's monthly production to decline 5% to 914,000 b/d, compared to a year ago. Before the incident, Alaska's production had increased 5 months in a row.

Total US production was 5.783 million b/d, 0.4% less than a year ago.

Imported crude oil and refined products of 11.353 million b/d were up nearly 1% compared to last year.

US dependency on foreign oil and products is 58.3%, about average for the past 2 years, but less than the 60% recorded in some months earlier this year, API said.

With the summer driving season completed, gasoline production hit a robust 8.648 million b/d in October, 7.7% more than a year ago. That was a record for this time of year. October's gasoline output was about the same as last July.

Refiners made 3.842 million b/d of distillate fuel used for diesel and home heating oil. That was the largest amount in nearly 5 years and the second highest amount ever, API said.

October crude oil inventories of 307.8 million bbl were 10.8% higher than October 2000 and about the same as at the end of September 2001.

The refinery utilization rate was steady at 92.1%.